Modern Mining January 2015

MINING News

Nachu graphite project heads for development

to Zambia rail link. Currently, they are working on a number of major infrastruc- ture projects in Tanzania with over 1 000 employees in the country. CRCC has also been involved in the construction of a number of mining plants in Africa. Magnis recently announced the com- pletion of a positive PFS on the Nachu project, based on an open-pit operation producing 180 000 t/a of graphite con- centrate with an average ore grade of 5,1 % graphite. The PFS put the capex at US$171,4 million with a capital payback period of 1,4 years. It estimated the after tax NPV at US$1 040 million and the IRR at 84 % (at a 10 % discount rate). Operating costs for the first three years of mine life are projected at US$448 per tonne of product. The plant design is based on a relatively standard crushing, rod mill grinding and flotation process. Several stages of regrind and cleaner flotation have been included. The PFS was conducted by BatteryLimits of Perth, a specialist process engineering and study management consultancy, in joint venture with LogiMan, a project engi- neering company based in Johannesburg. The mining study, including mining cost estimates and development of the mining schedule, was conducted by Orelogy Group, a Perth-based mining consultancy. The ini- tial design work on the tailings facility and associated volume estimates was done by Knight Peisold, based in Johannesburg.  reviewing all aspects of its business. This includes optimising its production portfolio, focusing on low cost production, optimally filling the rail line capacity and assessing Thabazimbi mine as part of the portfolio. It also includes reviewing capital expen- diture requirements and costs. Based on the current review, the company is plan- ning to reduce SIB (Stay in Business) capex (including deferred stripping at Sishen and Kolomela) by approximately 20 % and by a further 10 % in 2015 and 2016 respectively when compared to SIB capex guidance dis- closed in the 2013 Anglo American Investor Day presentation. Kumba is targeting reducing exploration, technical and project studies expenditure by approximately 50 % and is assessing a restructuring to deliver on the revised port- folio, potentially reducing Head Office roles by approximately 40 %. 

The port of Mtwara, approximately 200 km from the Nachu site, has sufficient capacity to handle exports from the project.

ASX-listed Magnis Resources has signed a Memorandum of Understanding (MOU) with China Railway 24th Bureau Group Co, Ltd. Under the MOU, the two compa- nies will enter into formal negotiations to secure a contract for engineering, procure- ment, construction and contract mining for the Nachu graphite plant in south-east Tanzania. The proposed value of the con- tract is US$150 million. Magnus says the next steps are a site visit and negotiations for the signing of contracts. All parties are aiming for project

development commencement in 2015. China Railway 24th Bureau Group Co, Ltd is wholly owned by publicly listed China Railway Construction Corporation Limited (CRCC), which is one of the largest integrated construction groups. It ranked 80th among the Fortune Global 500 Enterprises in 2014 and first among the ENR Top 250 Global Contractors in 2013. CRCC and its subsidiaries – including China Railway 24th Bureau Group Co, Ltd – have a long history of working through- out Africa including on the iconic Tanzania tonnes handled since June 2014. In 2015, the OperatingModel is expected to be rolled out to the pre-stripping opera- tions at Sishen mine to meet ramp up requirements, and to the Kolomela plant to increase throughput to 13 Mt/a in the medium term. Kumba aims to deliver approximately 5 Mt low capex production growth, which includes 2 Mt from Kolomela and the remainder from Sishen. Kumba anticipates total iron ore produc- tion of approximately 47 Mt in 2014, 47 to 48 Mt in 2015, 48 to 50 Mt in 2016 and 48 to 50 Mt in 2017. Blended free on board (FOB) cash costs are expected to be US$35/tonne in 2014, US$39/tonne in 2015, US$40/tonne in 2016 and US$41/tonne in 2017. In the current low price environment, which is expected to persist, Kumba is

Kumba reviewing all aspects of its business In a technical update issued in December 2014, Kumba says that its Sishen mine continues to performwell against its opera- tional plan and remains on track to increase production to 35 Mt in 2014, 36 Mt in 2015 and 37 Mt from 2016. Regarding the Kolomela mine, Kumba states that its life of mine (LoM) production capacity will be increased to 11 Mt/a from 2015. Studies are in progress at Kolomela which could result in increasing production further to 12 Mt in 2016 and to 13 Mt from 2017.

At Sishen, the ‘Operating Model’, which was implemented in August 2014 at the ore and internal waste mining opera- tions at North mine, is already yielding results including: improving scheduled work to increase efficiencies; a 50 % reduction in waiting time on shovels; and a 23 % efficiency improvement in total

16  MODERN MINING  January 2015